Indian-American Rajat Gupta, the former chief of global consulting business McKinsey & Co, has resigned as chairman of Indian School of Business (ISB) even while he faces civil charges from the Securities and Exchange Commission (SEC) of the US for passing confidential information to Galleon Group founder Raj Rajaratnam. FE first reported this development on March 8 as there was enough pressure building on him to quit ISB, one of the prestigious business schools in the country. Further, the ISB board is meeting on April 2 to consider the appointment of a new chairman . According to an official communiqu? from ISB, Rajat has asked ISB board to relieve him of his responsibilities. ?Rajat Gupta has requested the ISB executive board to relieve him of his board responsibilities till his pending matter with the US SEC is resolved. This, and the appointment of the new chairman, will be tabled at the upcoming board meeting on April 2nd, 2011,? an ISB spokesperson said. Following his resignation, he will not be attending the proposed board meet as well.
In its report, the SEC had accused Gupta of passing confidential information on Goldman Sachs Group Inc. and Procter & Gamble (P&G) in 2008 and 2009 to hedge fund manager Raj Rajaratnam, founder of Galleon Group. The charges against Gupta is part of the widening probe on insider trading initiated by the SEC against lawyers, consultants, accountants, corporate insiders and hedge fund managers.
According to the SEC, Gupta disclosed information to Rajaratnam about a $5 billion investment in Goldman by Warren Buffet?s Berkshire Hathaway. Besides, the report said that the tip-offs generated $18 million in profits or saved losses for Galleon.